Copper And Gold Prices Continue To Grow
Raw materials will remain under pressure from macroeconomic factors. The austerity measures and the financial health of the economy will determine the mood of investors.
In 2010, the commodity market offered a lot of suspense, dramatic ups and downs, which often put the forecasting specialists in difficulty. After a rather timid start, the sector has got gradually powers, adapting to the vagaries of an economy barely escaped the claws of the global crisis and recession. Dance chaotic U.S. dollar, the euro oscillations, astonishing progress of China’s Gross Domestic Product, the emerging markets in general, the debt crisis in the euro area, impact statements politicians driving the economy, the austerity measures adopted by most countries, banks intervention central or ratio between demand and supply, all these factors were reflected in a more or less prominent on the metals market, giving eternal headache experts in their search for credible explanations. Big banks on price forecasts of different raw materials, especially those deemed strategic or reference, in case of metals such as copper and gold in the base of precious metals, does not provide a clear picture.
Last week brought a new record for gold and copper. Yellow metal reached a record nominal value of $ 1431.25 per ounce, jumping for the first time the psychological threshold of $ 1.430. He explained that the advance was caused by a slight depreciation of the dollar and a new excess of caution from investors, who preferred to seek refuge again offered traditional, in moments of balance, the yellow metal as protection against risk inflation. In turn, copper, metals market barometer, went for the first time, the $ 9,000 / ton, crumbling, so the previous record of $ 8.966 per ton recorded on 11 November. Analysts at Barclays Capital estimate that prices of the precious metal will continue to grow.
“China consumes between 40% and 50% of global industrial metals. Organized slowing economy is not stagnant in China: according to our forecasts, China’s GDP will advance 9% -10% over the next three to five years. It is better than a rapid and accelerated as a crash. In China, industrialization, urbanization, infrastructure projects are not empty words, and as such do not anticipate a decrease in demand for copper, “says Nicholas Snowdon, expert of the bank. In addition, he said, “let’s not forget this offer: old mines are depleted and new ones are in places like Afghanistan and Pakistan. No hurry, now, to invest in these countries. As such, the relationship between supply and demand will encourage further growth of the quotations for copper.
In terms of gold, usually when the economy goes well, it goes wrong, because it is considered valuable refuge. But, warns expert Canadian Mathieu D’Anjou, “Gold has fallen several times during the crisis, as investors lacked liquidity.” Also, the yellow metal reacts to what happens to the dollar. In other words, gold prices spiked considerably in recent months, not because the world economy has led to a river, but because there are great concerns about the evolution of green bill, “said D’Anjou.
On the other hand, to reduce budget deficits, fiscal and trade, some of the major central banks, such as the United States, print money, they lose value. It creates, as such a contention on the international scene, because everyone wants a flexible currency, everyone and everyone wants to export jobs. In these circumstances, people are moving to safer assets, which is a limited offer as serve as a barometer.
“If you double the amount of money from the population, the price of a Picasso or a bar of gold will double, because supply is restricted,” said experts. Meanwhile, specialists bank Natixis said that austerity in Europe becomes a negative factor for gold. “The danger for a country to go bankrupt or the threat of sovereign debt restructuring is obviously positive for the gold. Correspondingly, the austerity budget and debt reduction are obviously negative, ” said an analysts at Natixis bank.
Tin enters the world market in 2011 with a significant deficit, which could cause a dramatic increase in the price of the metal base. From early 2010 until November 9 when the tin has reached the highest annual level, the $ 27.500 per ton, progress was 57.6%. Further decrease to $ 25.675 per ton did not exceed 6.6%. In the same type, stocks fell by half in the first three quarters of the year and, despite an advance to 15,755 tons, they are far from the volume of 26,795 tons recorded on 4 January. In this context, Stephen Briggs, analyst at BNP Paribas, believes that next year, global stocks will not get 35,000 tons. Therefore, only a new rate increase will balance the market, annihilating a part of the application. French bank forecasts indicate an average price of $ 28,000 / ton in 2011 and $ 30.250 per ton in 2012. Fred Demler, an expert at MF Global is counting on a course of tin $ 30,000 / ton by the end of this year and $ 35,000 to 40,000 ton in 2011.
Extraordinary increase in the price of gold leads them to abandon the traditional jewelers, jewelry made of yellow metal in favor of silver and other metals. “There is a tendency in the direction of silver and precious metals,” GFMS said experts at R Holt & Co. The company already invested in acquiring new equipment to reduce the maximum amount of gold used in the production process. British network stars Ernest Jones became jewelry silver bracelets that can be decorated with different stones. Designers say the company will use their creations in the future more and more alternatives to metals.
Market diamonds depends 95% of the luxury industry. Industrial applications use, in most cases, synthetic diamonds. In 2005, this segment was estimated at 64 billion dollars per year. Since then, increased by approximately 5% per year, performance contributed by China with $ 1.25 billion a year, India, Russia and Middle East countries. Currently, four states share almost 80% of world diamond production: Russia, Botswana, Australia and China.
In the first nine months of the year; China imported over 200 tons of gold, five times more than the entire amount purchased in 2009. Julianna Phillips at GoldForecaster.com, said that amid their growing wealth, the Chinese are saving about 40% of their revenues. Previously, they preferred to keep the means in bank deposits, but now increasingly buy gold, which tends to increase, says expert. The World Gold Council forecasts in the next decade, China’s gold imports will increase, so that metal consumption could reach 800-900 tons. In terms of investor demand growth rate, no one dare to predict.11